Jim Rogers: U.S. Already Has Lost AAA Rating

7/25/2011 10:31AM

Famed investor Jim Rogers says the U.S., in effect, already has lost its AAA credit rating amid fiscal mismanagement, and he remains pessimistic on the country's outlook. He calls the current debt negotiations in Washington a political "charade."

This transcript has been automatically generated and may not be 100% accurate.

Gou ... we're ... by all crazy in the ... morning ... for joining us ... never been very keen on the dollar where ... they are right now the current that U S debt talks in all negotiations or lack thereof of the last couple weeks ... have left the status of the of the world's reserve currency ... believe that the list of what you don't know yet to report on something ... that is basically a scam ... Shirati shares needed is trying to get publicity ... that are not going to default in the U S default to be where they are to begin to put together some kind of false package ... said there is a everything is alright ... that that everything is going to get worse ... what is the status of U S dollar ... I actually own U S dollar at the moment that everybody so pessimistic owners including the ... usually with that kind of thing happens ... something comes along and causes around playing with the intention to you hate the dollar but you're going and this sounds to me like a perfect example of everything that's happening everyone ... hates the status of what's happening in the U S to SE content as well ... you know maybe what's the worst can happen here and I really wanna hang on to these assets and how ... well chilly I've been investing a long time ... and I found that normally when everybody so one side of the boat ... you should go to the other side of these for the moment ... yes Lord I said everybody's pessimistic on the dollar including mate I'm one of the most pessimistic ... but I don't know that everybody's been beating the dollar down so I bought it gets to announce the package or did they change the laws to encourage dollars to go home ... who knows something that happened to cause a rally in the dollar ... longer term Apple II on the dollar absolutely not ... mention the chance to secure foreign firm viewers ... when we're talking about what happened next week or two in and around the word default as you say ... the chance of the US the likelihood that U S actually misses any payments or fences and how ... radically altered the status of its Evanson outstanding debt is small ones most likely to happen here ... is that the government effectively shut down ... discretionary spending cuts ... on that kind of thing selling that would be an outcome obviously with negative consequences for frozen in a good consequences for the dollar so why use a tumble holding it here ... as I said everybody's best risk everybody's over Dollar on this scenario which you just said ... and that could very well change no I don't expect them to have real spending cuts ... though it has been doing this for forty years ... talk about how the gonna ... solve the problems of the deficit ... you remember the Graves Commission ... delivered a grim Rudman at the Grand Rudman acts that we cannot have devastating anymore ... well I was twenty five years ago I forgot about new things this all much ado about nothing can you do have that feeling in markets this morning where people were so worried about how easily traded yes we have futures pointed down today but ... is there a sense the the the broader set of concerned people had ... a somewhat overdone ... you know nothing so much overdone Kelly but I think it's it's it's ... you know I think it's probably did agree ... that they're going to politicians ... that ... you something will get to the last minute ... us of the D ... grade skepticism about the political process perhaps with that in the and something will get done ... and as you save various Wall Street firms themselves ... have come out with different scenarios talk about tax receipts talk about cash flow being paid out ... so that ... I think would not at the point yet where ... they built the person personify the market that the new Miss The market thinks there's going to be a default ... and as we discussed previously ... it could be a two step process where it might be the lead of the major ratings agencies ... either another statement about how concerned they are inching closer to downgrade of the then precipitate ... more of a marker reaction which therefore ... you know right completes a circle with a politician's really able to cite them are ... a genteel character US loses triple A status ... the US has lost its AAA status it but you know what's going on to note that the US is what is now the largest debtor nation in the history of the well it's all in what is the SNP has a big about what's going on ... the World ... the investment will the financial world knows that America is not Schauble anymore who cares what Moody's said ... whizzes got everything wrong in the past ten years when you pay attention to judge and it does matter for certain investors pension funds announced on an otherwise you are only allowed to hold triple A papers are my guess I'm asking are you concerned about the potential impact that markets ... just purely from that point you in ... the U S losing its AAA rating from one of the agency's what the knock on effects would be ... absolutely not paying any attention it may have an effect for a day or two I'm sure that you love we reporting it non stop but it is totally a thing of the market ... the market looks a bit chilly ... this is not the first time the market is down with the fact that U S is bankrupt with YouTube if you if you ... would you say is true and of course obviously be seen in all sorts of climbs ... in market history we are ... things traded prices that are reflective of its official ratings ... year we heard before this morning that the ten year note of the truth is trading at two point nine nine ... is that ... so that means is if ... the market perceives the US is a double A ... credit ... it's still worth of two point nine nine ... return on a ten year note ... he'll either short United States government bonds long-term bonds ... I would lend money to the United States in US dollars for thirty years that three of four or five with you you name the interest rate rise to the ... one that very well be over the last couple months ... you're crazy but they should go to DowJones and that was going on so many money ... and a day I'm sure they don't and ... Dell in ... Delhi I shorted it you can ... follow the Dow Jones is the WhatsApp and ... FKG said it's more of a short-term trade and then a long-term one ... to those who hold short the U S the bond market ... the fund in the short a four-day week or ten years ... but I'm sure that as we speak ... with that with that something happened to him in Washington ... that would make you change your ... basic view ... of the creditworthiness of the United States ... oh sure if they took in at the top eight of the chainsaw ... United States government spending and yell or so at the change but ... will change so the government spending of course I was ... more they discovered natural gas and ... argue the huge oil field in Chicago ... many things that make me change for the moment ... I don't see anything that's really all ... this going to change as I said